I try to follow the Buffett, punch-card approach to portfolio management and, accordingly, have barely transacted in the last year. But a set-up is emerging that may be one of the most attractive I have seen in several years. Millicom’s (NYSE:TIGO) share price has been under severe pressure since late last year, in part due to the strengthening USD and weakness in the telco sector, but laregely due to uncertainty around a now-announced Rights Offering to fund the buyout of their Guatemalan JV partners, for $2.2b.
May 26, 2022·edited May 26, 2022Liked by Guy Davis
Thanks for laying out this thesis. One thing that I don't understand very well is that TIGO bought back shares before late 2021 and stopped after Nov 2021. I can understand that it is to do with the buying the remaining stake of their Guatemalan operation. The question is why they bought back the shares at a higher price and then had to do a right offering. This seems to hurt shareholders quite a bit.
Thanks so much for the write-up. Does the thesis remain intact after the big drop of the last 6 months?
Any idea how much cashflow they have to give up for "rent" after selling the towers?
Great piece. Thanks for sharing.
Thanks for laying out this thesis. One thing that I don't understand very well is that TIGO bought back shares before late 2021 and stopped after Nov 2021. I can understand that it is to do with the buying the remaining stake of their Guatemalan operation. The question is why they bought back the shares at a higher price and then had to do a right offering. This seems to hurt shareholders quite a bit.
caught this a little late, but am looking for some clarity on the play. buy more common and\or exercise all the rights offering?
in case you were unaware of these other resources :
- Keith smith of bonhoeffer has done some pods\vids and is deep into tigo...hoping for a timely update from him on the rights
-ben claremon of cove street did an older podcast with the CEO prior to the Guatemala acq.